MR. FLEISCHER: -- so
I will go over what he's doing, to celebrate Greek Independence
Day. That's press pool coverage at 3:50 p.m. in the Indian
Treaty Room. He'll be joined by several elected officials
and leaders of the Greek Community.

Tax
family. To do something different, we'll have a tax family
join us today. The Hanington Family: Willard
Hanington, Jr. He's a small business owner, in a
family-owned logging business named Willard S. Hanington and
Sons. His wife, whose named Karlene, Karlene Hanington.
She's a part-time bookkeeper at Willard Hanington and
Sons. They have three children: daughter Kayla,
14 years old; daughter, Laci, two-and-a-half years old; and the son's
name -- anyone want to take any guesses on the son's name?

Q Willard.

MR. FLEISCHER: No.

Q Ari?

MR.
FLEISCHER: Logan. He's 10 years
old. They are from Wytopitlock, Maine. They met
in high school, been married for 13 years. They're from
Northern Maine. They currently have a joint income of
$54,000. They currently pay $2,850 in federal income
taxes. Under the President's plan, they would pay $700 in
federal income taxes, or a 75 percent tax cut. That's resulted from
the 10 percent tax bracket, doubling the child credit and from the the
President's marriage --

Q What is the total savings?

MR. FLEISCHER: The total savings is
$2,150, a 75 percent tax cut for the Hanington family of Wytopitlock,
Maine.

Q What's their
total income?

MR. FLEISCHER: I
think it's $54,000.

Q How long did you say they've been married?

MR. FLEISCHER: They're high school
sweethearts, Frank. They've been married for 13 years, thank
you for asking.

Q One
of their daughters is 14.

MR.
FLEISCHER: I think that's a question you should ask the
Haningtons.

Q So I did
hear correctly?

MR.
FLEISCHER: That's what the information says.

Q Okay.

Q Would you say that
their marriage is strong after 13 years? (Laughter.)

MR. FLEISCHER: The President
believes that Mr. Hanington is a good man.

Q Is he a solid man?

MR. FLEISCHER: Any other questions from you PGs when we have
assembled?

Q Ari --
Russian expulsions -- the White House --

MR.
FLEISCHER: The President took the action he believes is
appropriate to the national interests. We're aware of what
Russia has said, and what they said they will do. The
President considers the matter closed.

Q Does he not have any reaction to the fact that
Russia reciprocated?

MR.
FLEISCHER: The President considers the matter closed.

Q What does that
mean? That's not an answer.

MR.
FLEISCHER: That's the President's view.

Q So he has no reaction
to what Russia did?

MR.
FLEISCHER: The Russians have taken the action they
did. The President considers the matter closed.

Q What should Americans
conclude from all of this? That it's, you know, a sort of
Cold War redux? I mean, he considers it closed, but don't
people need to understand? What interpretation should they
have from all of this?

MR.
FLEISCHER: That even in the post-Cold War era
intelligence-gathering goes on. That's no surprise to
anybody. But when something -- a violation as serious as
took place in the Hanssen incident occurs, President Bush will take
appropriate action. And by that, he expelled four Russian
diplomats as PNGs.

Q Has the President made any
calls? Has he called President Putin or any other world
leaders since yesterday?

MR.
FLEISCHER: I told you about the call to the -- Emir to talk
about Qatar yesterday morning. No calls this morning.

Q Ari, how would this
$60-billion plan that Domenici is working on in the Senate, how would
that affect the phase-in and then total amount in $1.6-trillion
package?

MR. FLEISCHER: It all
depends on the details, how they do it, when they do it. As
far as the President is concerned, this is one more indication of
Congress joining with him, hopefully in a bipartisan way -- activity.

Q He sounded really
concerned that this ultimately makes the size of the tax package larger
than $1.6 trillion.

MR.
FLEISCHER: No, he still believes it should be limited to
$1.6 trillion.

Q I
know what he believes, but if they do this, unless other adjustments
are made, the package gets bigger, necessarily. Is he okay
with that?

MR. FLEISCHER: No, he's
going to keep it to $1.6 trillion. He'll keep working with
Congress.

Q --
(inaudible.) --

MR. FLEISCHER: It's
too soon to say.

Q But
something has to give in the later years, right, if you put it all to
the --

MR. FLEISCHER: It's the
beginning of the process. We have to see exactly what the
Senate does, go to the conference with the House, and add it
up. And the President wants to limit it to $1.6
trillion. But he also, as he said, wanted retroactivity, so
he's pleased with what the Senate is doing. The House did
something similar. The Senate is taking a look at doing
something on retroactivity; the President called for it, so he's
pleased to do it.

Q (Inaudible.)

MR.
FLEISCHER: Senator Snowe is on board; Senator Collins is on
board; Congressman Allen is on board. Jock McKernan is on
board. The whole delegation was invited. The
President enjoys reaching out and talking to members of Congress about
his priorities, and he's visiting their state, so it's nice they're on
board -- it's a twofer -- he gets to invite them to travel back to
their state, and he gets to make his case for his budget priorities.

Q Who is playing good
cop and who is playing bad cop? Karl, Andy, the
President? How do they work? Give us a fill.

MR. FLEISCHER: One is a very good
cop. The other is Karl. (Laughter.)

Q -- named in the
magazines. (Laughter.)

Q The Rumsfeld story in The Post today -- will
his review include cutting back on large Navy aircraft and spending
more on long-range bombers?

MR.
FLEISCHER: No, I didn't see it.

Q How true is the story?

MR. FLEISCHER: Much too soon to
say. Much too soon. No recommendations have been
made. It's still early in the review process.

All right.

Q Does the President have a reaction to Senator
Nickles's indication that he would welcome a compromise on campaign
finance reform?

MR. FLEISCHER: It
was a different question. On that question, a compromise on
campaign finance reform, the President is pleased that it looks like
this year we may be able -- Congress may be able to make progress and
find common agreement because it's eluded the Congress and the
President for the last many years. So --

Q Is this the kind of
compromise you think he could accept?

MR.
FLEISCHER: He's not going to comment specifically amendment
by amendment, but he wants to create an environment where compromises
can be made so that a campaign finance reform bill that is as close as
possible to his principles can land on his desk and be signed.

Q -- changed his view
that he won't sign a campaign finance bill that does not include
paycheck protection?

MR.
FLEISCHER: He's never said that. He's always said
that he believes we should have paycheck protection. That
was part of his principles, but he's never said what he won't
sign. In fact, he said the opposite. He said this
year, we can get a good bill signed into law, and he'll do so.

Q So it's possible that
he could?

MR. FLEISCHER: He made
it clear yesterday in the meeting with Republican whips that people --
Democrats shouldn't look for him to veto this bill as their way of
getting off of it; Republicans, too. That he is going to
keep building common ground and keep working in a way by not
criticizing, by not painting people into corners so that people can
indeed come together in a toned-down way to get this thing ready for a
presidential signature.

All right, all you
PGs. See you later.

Q I didn't hear you very well over the
noise. I want to -- tax family names?

Q Ari, I could not hear
something so well, and Scott's comment to me yesterday was a little
ambiguous, so help me out. He -- if they did something like
an immediate rebate or whatever, he wants to keep it at $1.6 trillion,
so there would have to be an adjustment in another place?

MR. FLEISCHER: Well, obviously, the
President is going to keep it at $1.6 trillion.

Q Period?

MR. FLEISCHER: He called for
retroactivity. So the day he called for retroactivity, it indicated
that the size would be somewhat in excess of $1.6 trillion, depending
on the decisions they made in the House of $6 billion. So
we'll have to see whether it starts to end up as it gets closer to
conference, and in conference, and has a lot of moving pieces, and the
President has set out two specific goals: One, he wants it
retroactive; two, he wants to keep it at $1.6 trillion.

Q I'm still
confused. You said when he said he wanted retroactivity, you
just said, that indicated the size would be in excess of $1.6
trillion.

MR. FLEISCHER: And he
wants to keep it to $1.6 trillion. That's why either --

Q So how can the size
be in excess of $1.6 trillion and be kept at $1.6 trillion?

MR. FLEISCHER: Because if you're
looking at the various components until -- until an agreement is
reached.

Q So if the
two things together added up to more than $1.6 trillion, that might be
okay?

MR. FLEISCHER: No, the
President wants to keep it at $1.6 trillion.

Q Is he averse to changing the estate tax to
keep it at $1.6 trillion?

MR.
FLEISCHER: I'm not speculating about any of the other moving
pieces, but he wants to keep it at $1.6 trillion.

Q If there is
retroactivity beyond what he's laid out, something else would have to
give.

MR. FLEISCHER: It also
depends on the final agreements that they reach. It depends on the
number. For example, the House was $6 billion. You're
dealing in the area of rounding. So it all depends on
exactly what the numbers come out to in the end.

Q So, it does have to
be $1.6.00000 is what you're saying?

MR.
FLEISCHER: Well, it -- the House is pretty close to that, so
we have to see exactly what the numbers are. It's the
beginning of the process, we'll see what passes in the Senate, go to a
conference, and then the President will work to resolve $1.6 trillion
retroactivity.

Q As he
sees it, there's room within his own personal math to have the
$1.6-trillion plan he laid out, and a little retroactivity that
basically doesn't really bust that figure? Is that what
you're saying?